Location: Penobscot County, ME | Metro: Bangor, ME HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,290 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,760 |
| 3 Bedrooms | $2,330 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,760 | $270,956 | 0.65% | D |
| 3BR | $2,330 | $351,181 | 0.66% | D |
| 4BR | $2,520 | $466,316 | 0.54% | F |
| 5BR | $2,923 | $543,784 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 04444 (Hampden, ME) reveals an interesting dynamic between government-subsidized rental income and market rents. For a two-bedroom unit, the Fair Market Rent (FMR) set by the government for FY 2024 is $1270 per month. This translates into an annual rental income of $15,240. When this figure is compared to the median home value of $345,249, the implied gross yield for a Section 8 property in this area is approximately 4.4%. This calculation provides a baseline for understanding the potential returns on investment for properties participating in the Section 8 program.
In contrast, the Zillow Observed Rent Index (ZORI) for a similar two-bedroom unit is $1,150 per month, resulting in an annual rental income of $13,800. Using the same median home value, the gross yield based on market rents is approximately 3.9%. This lower yield reflects the difference in rental rates between the subsidized Section 8 program and the general market.
Given the 15.1% renter density in Hampden, it is reasonable to expect that a significant portion of the rental market could be served by the Section 8 program. However, the lack of available data on days-on-market (DOM) makes it difficult to predict how quickly a property might be leased under either scenario. Despite this uncertainty, the higher gross yield from Section 8 rentals suggests a more attractive investment opportunity compared to market rents.
Investors should consider the stability and security of rental income from the Section 8 program, which is guaranteed by the federal government, versus the variability of market rents. The Section 8 program offers a consistent cash flow, which can be particularly beneficial in areas with low renter density like Hampden, where finding tenants might be challenging. While the market rent scenario offers a slightly lower gross yield, it still provides a solid return on investment, especially if the property can be leased quickly and consistently.
To summarize, the Section 8 cap rate for ZIP 04444 implies a gross yield of about 4.4%, while market rents suggest a gross yield of around 3.9%. The higher yield from Section 8 rentals is more realistic given the local context and the reliability of the guaranteed income stream. However, the decision ultimately depends on the investor's risk tolerance and financial goals.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.